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Share Name | Share Symbol | Market | Type |
---|---|---|---|
ONE Group Hospitality Inc | NASDAQ:STKS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.145 | -2.84% | 4.965 | 4.96 | 4.98 | 5.22 | 4.95 | 5.10 | 77,341 | 17:02:47 |
|
(Mark One)
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the Quarterly Period Ended March 31, 2017
|
OR
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from
to
|
Commission File Number
001-37379
|
THE ONE GROUP HOSPITALITY, INC.
|
Delaware
|
|
14-1961545
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
411 W. 14
th
Street, 2
nd
Floor, New York, New York
|
|
10014
|
(Address of principal executive offices)
|
|
Zip Code
|
646-624-2400
|
(Registrant’s telephone number, including area code)
|
Large accelerated filer
¨
|
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
(do not check if a smaller reporting company)
|
Smaller reporting company
x
|
|
|
Emerging growth company
¨
|
|
Page
|
|
|
|
|
|
||
Consolidated Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2016
|
|
|
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2017 and 2016 (unaudited)
|
|
|
Consolidated Statement of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2017 (unaudited)
|
6
|
|
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016 (unaudited)
|
7
|
|
8
|
|
|
21
|
|
|
39
|
|
|
39
|
|
|
|
|
|
|
|
|
|
||
|
||
|
||
|
||
40
|
|
|
|
||
|
||
|
|
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
1,787,850
|
|
|
$
|
1,597,782
|
|
Accounts receivable, net
|
5,326,175
|
|
|
4,959,822
|
|
||
Inventory
|
1,386,965
|
|
|
1,308,851
|
|
||
Other current assets
|
2,317,835
|
|
|
1,811,787
|
|
||
Due from related parties, net
|
708,411
|
|
|
415,773
|
|
||
Total current assets
|
11,527,236
|
|
|
10,094,015
|
|
||
|
|
|
|
||||
Property and equipment, net
|
37,302,061
|
|
|
36,815,239
|
|
||
Investments
|
3,110,868
|
|
|
3,065,557
|
|
||
Deferred tax assets
|
51,890
|
|
|
51,031
|
|
||
Security deposits
|
2,210,346
|
|
|
2,203,837
|
|
||
Other assets
|
627,751
|
|
|
661,936
|
|
||
Total assets
|
$
|
54,830,152
|
|
|
$
|
52,891,615
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Cash overdraft
|
$
|
1,316,115
|
|
|
$
|
679,938
|
|
Long term debt, current portion
|
4,057,042
|
|
|
3,153,666
|
|
||
Accounts payable
|
6,146,020
|
|
|
3,761,823
|
|
||
Accrued expenses
|
4,279,913
|
|
|
5,549,638
|
|
||
Deferred license revenue
|
109,957
|
|
|
109,957
|
|
||
Deferred revenue
|
754,742
|
|
|
612,574
|
|
||
Total current liabilities
|
16,663,789
|
|
|
13,867,596
|
|
||
|
|
|
|
||||
Deferred license revenue, long-term
|
1,550,843
|
|
|
1,109,635
|
|
||
Due to related parties, long term
|
1,197,375
|
|
|
1,197,375
|
|
||
Long term debt, net of current portion
|
12,429,710
|
|
|
13,167,867
|
|
||
Deferred rent payable
|
16,135,555
|
|
|
16,170,605
|
|
||
Total liabilities
|
47,977,272
|
|
|
45,513,078
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Common stock, $0.0001 par value, 75,000,000 shares authorized; 25,050,628 shares issued and outstanding at March 31, 2017 (unaudited) and December 31, 2016
|
2,505
|
|
|
2,505
|
|
||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2017 (unaudited) and December 31, 2016
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
37,537,582
|
|
|
37,384,243
|
|
||
Accumulated deficit
|
(28,164,960
|
)
|
|
(27,763,194
|
)
|
||
Accumulated other comprehensive loss
|
(1,600,129
|
)
|
|
(1,543,951
|
)
|
||
Total stockholders’ equity
|
7,774,998
|
|
|
8,079,603
|
|
||
Noncontrolling interest
|
(922,118
|
)
|
|
(701,066
|
)
|
||
Total stockholders’ equity including noncontrolling interest
|
6,852,880
|
|
|
7,378,537
|
|
||
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
$
|
54,830,152
|
|
|
$
|
52,891,615
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenues:
|
|
|
|
||||
Owned unit net revenues
|
$
|
18,112,982
|
|
|
$
|
14,379,930
|
|
Management and incentive fee revenue
|
2,313,716
|
|
|
2,014,051
|
|
||
Total revenue
|
20,426,698
|
|
|
16,393,981
|
|
||
|
|
|
|
||||
Cost and expenses:
|
|
|
|
||||
Owned operating expenses:
|
|
|
|
||||
Food and beverage costs
|
4,674,061
|
|
|
3,528,753
|
|
||
Unit operating expenses
|
11,507,774
|
|
|
9,247,655
|
|
||
General and administrative
|
2,920,897
|
|
|
2,683,696
|
|
||
Depreciation and amortization
|
865,870
|
|
|
522,639
|
|
||
Lease termination expense
|
28,161
|
|
|
—
|
|
||
Pre-opening expenses
|
714,342
|
|
|
900,186
|
|
||
Equity in income of investee companies
|
(45,311
|
)
|
|
(82,585
|
)
|
||
Derivative income
|
—
|
|
|
(100,000
|
)
|
||
Interest expense, net of interest income
|
258,990
|
|
|
98,169
|
|
||
Other expense
|
11,948
|
|
|
225,034
|
|
||
Total costs and expenses
|
20,936,732
|
|
|
17,023,547
|
|
||
|
|
|
|
||||
Loss from continuing operations before provision for income taxes
|
(510,034
|
)
|
|
(629,566
|
)
|
||
|
|
|
|
||||
Income tax benefit
|
(16,746
|
)
|
|
(65,951
|
)
|
||
|
|
|
|
||||
Loss from continuing operations
|
(493,288
|
)
|
|
(563,615
|
)
|
||
|
|
|
|
||||
Loss (income) from discontinued operations, net of taxes
|
106,230
|
|
|
(1,835
|
)
|
||
|
|
|
|
||||
Net loss
|
(599,518
|
)
|
|
(561,780
|
)
|
||
Less: net loss attributable to noncontrolling interest
|
(197,752
|
)
|
|
(104,877
|
)
|
||
Net loss attributable to The ONE Group Hospitality, Inc.
|
$
|
(401,766
|
)
|
|
$
|
(456,903
|
)
|
|
|
|
|
||||
Amounts attributable to The ONE Group Hospitality, Inc.:
|
|
|
|
||||
Loss from continuing operations
|
$
|
(295,536
|
)
|
|
$
|
(458,738
|
)
|
Loss (income) from discontinued operations, net of taxes
|
106,230
|
|
|
(1,835
|
)
|
||
Net loss attributable to The ONE Group Hospitality, Inc.
|
$
|
(401,766
|
)
|
|
$
|
(456,903
|
)
|
|
|
|
|
||||
Net loss attributable to The ONE Group Hospitality, Inc.
|
$
|
(401,766
|
)
|
|
$
|
(456,903
|
)
|
Other comprehensive loss
|
|
|
|
||||
Currency translation adjustment
|
(56,178
|
)
|
|
(21,405
|
)
|
||
|
|
|
|
||||
Comprehensive loss
|
$
|
(457,944
|
)
|
|
$
|
(478,308
|
)
|
Basic and diluted loss per share:
|
|
|
|
||||
|
|
|
|
||||
Continuing operations
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
Discontinued operations
|
$
|
0.00
|
|
|
$
|
0.00
|
|
Net loss per share attributable to The ONE Group Hospitality, Inc.
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
||||
Shares used in computing basic and diluted loss per share
|
25,050,628
|
|
|
25,250,424
|
|
|
Common stock
|
|
Additional
paid-in
capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Total
stockholders'
equity
|
|
Noncontrolling
interest
|
|
Total
stockholders'
equity
including
noncontrolling
interest
|
|||||||||||||||||
|
Shares
|
|
Par value
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2016
|
25,050,628
|
|
|
$
|
2,505
|
|
|
$
|
37,384,243
|
|
|
$
|
(27,763,194
|
)
|
|
$
|
(1,543,951
|
)
|
|
$
|
8,079,603
|
|
|
$
|
(701,066
|
)
|
|
$
|
7,378,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Stock based compensation expense
|
—
|
|
|
—
|
|
|
153,339
|
|
|
|
|
|
|
153,339
|
|
|
|
|
153,339
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Distributions to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(23,300
|
)
|
|
(23,300
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Loss on foreign currency translation, net
|
|
|
|
|
|
|
|
|
|
|
|
|
(56,178
|
)
|
|
(56,178
|
)
|
|
|
|
|
(56,178
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
(401,766
|
)
|
|
|
|
|
(401,766
|
)
|
|
(197,752
|
)
|
|
(599,518
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at March 31, 2017
|
25,050,628
|
|
|
$
|
2,505
|
|
|
$
|
37,537,582
|
|
|
$
|
(28,164,960
|
)
|
|
$
|
(1,600,129
|
)
|
|
$
|
7,774,998
|
|
|
$
|
(922,118
|
)
|
|
$
|
6,852,880
|
|
|
Three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Operating activities:
|
|
|
|
|
|
||
Net loss
|
$
|
(599,518
|
)
|
|
$
|
(561,780
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
865,870
|
|
|
522,639
|
|
||
Amortization of discounts on warrants
|
47,312
|
|
|
—
|
|
||
Deferred rent payable
|
(35,050
|
)
|
|
206,711
|
|
||
Deferred taxes
|
—
|
|
|
341,503
|
|
||
Equity in income of investee companies
|
(45,311
|
)
|
|
(82,585
|
)
|
||
Derivative income
|
—
|
|
|
(100,000
|
)
|
||
Stock-based compensation
|
153,339
|
|
|
143,967
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
(386,185
|
)
|
|
(10,932
|
)
|
||
Inventory
|
(78,114
|
)
|
|
41,909
|
|
||
Other current assets
|
(506,444
|
)
|
|
(23,041
|
)
|
||
Due from related parties, net
|
(292,638
|
)
|
|
(105,276
|
)
|
||
Security deposits
|
(6,509
|
)
|
|
(3,225
|
)
|
||
Other assets
|
32,018
|
|
|
(259,455
|
)
|
||
Accounts payable
|
2,393,846
|
|
|
154,037
|
|
||
Accrued expenses
|
(1,278,312
|
)
|
|
(773,854
|
)
|
||
Deferred revenue
|
583,376
|
|
|
129,019
|
|
||
Net cash provided by (used in) operating activities
|
847,680
|
|
|
(380,363
|
)
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
|
|
||
Purchase of property and equipment
|
(1,353,441
|
)
|
|
(3,703,329
|
)
|
||
Distributions from equity investees
|
—
|
|
|
105,401
|
|
||
Net cash used in investing activities
|
(1,353,441
|
)
|
|
(3,597,928
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
|
|
||
Cash overdraft
|
636,177
|
|
|
(7,948
|
)
|
||
Proceeds from promissory note
|
1,000,000
|
|
|
—
|
|
||
Repayment of term loan
|
(799,674
|
)
|
|
(373,750
|
)
|
||
Repayment of equipment financing agreement
|
(82,419
|
)
|
|
(49,341
|
)
|
||
Proceeds from rights offering
|
—
|
|
|
3,862,990
|
|
||
Distributions to noncontrolling interest
|
(23,300
|
)
|
|
(59,085
|
)
|
||
Net cash provided by financing activities
|
730,784
|
|
|
3,372,866
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(34,955
|
)
|
|
(22,782
|
)
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
190,068
|
|
|
(628,207
|
)
|
||
Cash and cash equivalents, beginning of period
|
1,597,782
|
|
|
1,841,872
|
|
||
Cash and cash equivalents, end of period
|
$
|
1,787,850
|
|
|
$
|
1,213,665
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow data:
|
|
|
|
|
|
||
Interest paid
|
$
|
137,513
|
|
|
$
|
175,014
|
|
Income taxes paid
|
$
|
—
|
|
|
$
|
108,624
|
|
|
|
|
|
||||
Noncash investing and financing activities:
|
|
|
|
||||
Noncash property and equipment additions
|
$
|
—
|
|
|
$
|
278,955
|
|
|
At March 31,
2017 |
|
At December 31,
2016 |
||||
|
|
|
|
||||
Food
|
$
|
280,051
|
|
|
$
|
209,319
|
|
Beverages
|
1,106,914
|
|
|
1,099,532
|
|
||
Totals
|
$
|
1,386,965
|
|
|
$
|
1,308,851
|
|
|
At March 31,
|
|
At December 31,
|
||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Income tax receivable
|
$
|
212,252
|
|
|
$
|
212,252
|
|
Landlord receivable
|
258,104
|
|
|
678,604
|
|
||
Prepaid expenses
|
677,726
|
|
|
537,891
|
|
||
Rent
|
624,150
|
|
|
68,740
|
|
||
Deposits
|
250,000
|
|
|
250,000
|
|
||
Other
|
295,603
|
|
|
64,300
|
|
||
Totals
|
$
|
2,317,835
|
|
|
$
|
1,811,787
|
|
|
At March 31,
2017 |
|
At December 31,
2016 |
||||
|
|
|
|
||||
Furniture, fixtures and equipment
|
$
|
9,328,638
|
|
|
$
|
9,130,469
|
|
Leasehold improvements
|
36,627,346
|
|
|
36,147,135
|
|
||
Less accumulated depreciation and amortization
|
16,629,416
|
|
|
15,809,101
|
|
||
|
29,326,568
|
|
|
29,468,503
|
|
||
Construction in progress
|
6,472,701
|
|
|
5,992,614
|
|
||
Restaurant supplies
|
1,502,792
|
|
|
1,354,122
|
|
||
Total
|
$
|
37,302,061
|
|
|
$
|
36,815,239
|
|
|
At March 31,
2017 |
|
At December 31,
2016 |
||||
|
|
|
|
||||
Sales tax payable
|
$
|
1,047,890
|
|
|
$
|
1,386,499
|
|
Payroll and related
|
477,534
|
|
|
730,615
|
|
||
Income taxes payable
|
—
|
|
|
144,452
|
|
||
Due to hotels
|
1,044,200
|
|
|
1,327,026
|
|
||
Legal
|
275,000
|
|
|
704,190
|
|
||
Rent
|
569,023
|
|
|
320,854
|
|
||
Insurance
|
—
|
|
|
150,000
|
|
||
Interest
|
156,250
|
|
|
—
|
|
||
Other
|
710,016
|
|
|
786,002
|
|
||
Totals
|
$
|
4,279,913
|
|
|
$
|
5,549,638
|
|
|
At
|
|
At
|
||||
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
Term Loan Agreements
|
$
|
8,777,918
|
|
|
$
|
9,485,000
|
|
Equipment Financing Agreements
|
1,340,675
|
|
|
1,421,033
|
|
||
American Express Loan
|
907,409
|
|
|
—
|
|
||
Promissory notes, net
|
6,250,000
|
|
|
6,250,000
|
|
||
|
17,276,002
|
|
|
17,156,033
|
|
||
Less: Current portion of Long Term Debt
|
4,057,042
|
|
|
3,153,666
|
|
||
Discount on warrants, net
|
789,250
|
|
|
834,500
|
|
||
Long Term Debt, net of Current Portion
|
$
|
12,429,710
|
|
|
$
|
13,167,867
|
|
|
|
|
|
||||
Future minimum loan payments:
|
|
|
|
||||
2017
|
3,274,174
|
|
|
|
|||
2018
|
3,170,310
|
|
|
|
|||
2019
|
3,187,808
|
|
|
|
|||
2020
|
1,280,594
|
|
|
|
|||
2021
|
113,116
|
|
|
|
|||
Thereafter
|
6,250,000
|
|
|
|
|||
Total
|
$
|
17,276,002
|
|
|
|
|
At March 31,
2017 |
|
At December 31,
2016 |
||||
|
|
|
|
||||
Bagatelle NY LA Investors, LLC ("Bagatelle Investors")
|
$
|
18,631
|
|
|
$
|
6,569
|
|
Bagatelle Little West 12th, LLC ( "Bagatelle NY")
|
2,635,496
|
|
|
2,552,687
|
|
||
One 29 Park, LLC ("One 29 Park")
|
456,741
|
|
|
506,301
|
|
||
Totals
|
$
|
3,110,868
|
|
|
$
|
3,065,557
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Equity in income of investee companies
|
$
|
45,311
|
|
|
$
|
82,585
|
|
Period
|
|
Payments
|
|
Receipts
|
|
Net
Amount
|
||||||
2017
|
|
$
|
5,596,757
|
|
|
$
|
(507,436
|
)
|
|
$
|
5,089,321
|
|
2018
|
|
7,554,444
|
|
|
(690,980
|
)
|
|
6,863,464
|
|
|||
2019
|
|
7,613,432
|
|
|
(706,235
|
)
|
|
6,907,197
|
|
|||
2020
|
|
7,853,932
|
|
|
(675,768
|
)
|
|
7,178,164
|
|
|||
2021
|
|
7,376,633
|
|
|
(121,656
|
)
|
|
7,254,977
|
|
|||
Thereafter
|
|
89,682,674
|
|
|
—
|
|
|
89,682,674
|
|
|||
Total
|
|
$
|
125,677,872
|
|
|
$
|
(2,702,075
|
)
|
|
$
|
122,975,797
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
||||
Other current assets
|
$
|
107,630
|
|
|
$
|
107,630
|
|
Assets of discontinued operations - current
|
107,630
|
|
|
107,630
|
|
||
|
|
|
|
||||
Security deposits
|
75,000
|
|
|
84,904
|
|
||
Assets of discontinued operations - long term
|
75,000
|
|
|
84,904
|
|
||
|
|
|
|
||||
Accounts payable and accrued liabilities
|
535,406
|
|
|
529,797
|
|
||
Liabilities of discontinued operations - current
|
535,406
|
|
|
529,797
|
|
||
|
|
|
|
||||
Net assets
|
$
|
(352,776
|
)
|
|
$
|
(337,263
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Revenue
|
$
|
—
|
|
|
$
|
—
|
|
Costs and Expenses
|
106,230
|
|
|
(1,835
|
)
|
||
Net (loss) income from discontinued operations, net of taxes
|
$
|
(106,230
|
)
|
|
$
|
1,835
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
|
Intrinsic
Value
|
|||||
|
|
|
|
|
|
|
|
|||||
Outstanding at December 31, 2016
|
1,857,012
|
|
|
$
|
4.28
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Cancelled, expired, or forfeited
|
207,500
|
|
|
$
|
3.43
|
|
|
|
|
|
||
Outstanding at March 31, 2017
|
1,649,512
|
|
|
$
|
4.39
|
|
|
7.69
|
|
$
|
—
|
|
Exercisable at March 31, 2017
|
873,341
|
|
|
$
|
4.69
|
|
|
6.76
|
|
$
|
—
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenues:
|
|
|
|
||||
STKs
|
$
|
16,369,334
|
|
|
$
|
13,680,430
|
|
F&B
|
2,313,716
|
|
|
2,014,051
|
|
||
Other
|
1,743,648
|
|
|
699,500
|
|
||
|
|
|
|
||||
|
$
|
20,426,698
|
|
|
$
|
16,393,981
|
|
|
|
|
|
||||
Segment Profit (loss):
|
|
|
|
||||
STKs
|
$
|
1,288,390
|
|
|
$
|
1,188,663
|
|
F&B
|
2,313,716
|
|
|
2,014,051
|
|
||
Other
|
642,757
|
|
|
414,859
|
|
||
|
|
|
|
||||
Total segment profit
|
4,244,863
|
|
|
3,617,573
|
|
||
|
|
|
|
||||
General and administrative
|
2,920,897
|
|
|
2,683,696
|
|
||
Depreciation and amortization
|
865,870
|
|
|
522,639
|
|
||
Interest expense, net of interest income
|
258,990
|
|
|
98,169
|
|
||
Other
|
709,140
|
|
|
942,635
|
|
||
|
|
|
|
||||
Loss from continuing operations before provision for income taxes
|
$
|
(510,034
|
)
|
|
$
|
(629,566
|
)
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
|
|
|
||||
Property & equipment, net:
|
|
|
|
||||
STKs
|
$
|
36,987,974
|
|
|
$
|
36,505,741
|
|
F&B
|
257,711
|
|
|
253,120
|
|
||
Other
|
56,376
|
|
|
56,378
|
|
||
Total
|
37,302,061
|
|
|
36,815,239
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
United States:
|
|
|
|
||||
Revenues - owned units
|
$
|
18,112,982
|
|
|
$
|
14,379,930
|
|
Management, incentive and royalty fee revenue
|
1,836,123
|
|
|
1,455,818
|
|
||
|
|
|
|
||||
Foreign:
|
|
|
|
||||
Management and development fee revenue
|
477,593
|
|
|
558,233
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
United States:
|
|
|
|
|
|
||
Net assets
|
$
|
3,559,570
|
|
|
$
|
3,899,627
|
|
|
|
|
|
||||
Foreign:
|
|
|
|
||||
Net assets
|
$
|
3,293,310
|
|
|
$
|
3,478,911
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenues:
|
|
|
|
||||
Owned unit net revenues
|
$
|
18,112,982
|
|
|
$
|
14,379,930
|
|
Management and incentive fee revenue (1)
|
2,313,716
|
|
|
2,014,051
|
|
||
Total revenue
|
20,426,698
|
|
|
16,393,981
|
|
||
|
|
|
|
||||
Cost and expenses:
|
|
|
|
||||
Owned operating expenses:
|
|
|
|
||||
Food and beverage costs
|
4,674,061
|
|
|
3,528,753
|
|
||
Unit operating expenses
|
11,507,774
|
|
|
9,247,655
|
|
||
General and administrative
|
2,920,897
|
|
|
2,683,696
|
|
||
Depreciation and amortization
|
865,870
|
|
|
522,639
|
|
||
Lease termination expense
|
28,161
|
|
|
—
|
|
||
Pre-opening expenses
|
714,342
|
|
|
900,186
|
|
||
Equity in income of investee companies
|
(45,311
|
)
|
|
(82,585
|
)
|
||
Derivative income
|
—
|
|
|
(100,000
|
)
|
||
Interest expense, net of interest income
|
258,990
|
|
|
98,169
|
|
||
Other expense
|
11,948
|
|
|
225,034
|
|
||
|
|
|
|
||||
Total costs and expenses
|
20,936,732
|
|
|
17,023,547
|
|
||
|
|
|
|
||||
Loss from continuing operations before provision for income taxes
|
(510,034
|
)
|
|
(629,566
|
)
|
||
|
|
|
|
||||
Income tax benefit
|
(16,746
|
)
|
|
(65,951
|
)
|
||
|
|
|
|
||||
Loss from continuing operations
|
(493,288
|
)
|
|
(563,615
|
)
|
||
|
|
|
|
||||
Loss (income) from discontinued operations, net of taxes
|
106,230
|
|
|
(1,835
|
)
|
||
|
|
|
|
||||
Net loss
|
(599,518
|
)
|
|
(561,780
|
)
|
||
Less: net income attributable to noncontrolling interest
|
(197,752
|
)
|
|
(104,877
|
)
|
||
|
|
|
|
||||
Net loss attributable to The ONE Group Hospitality, Inc.
|
$
|
(401,766
|
)
|
|
$
|
(456,903
|
)
|
|
|
|
|
||||
Amounts attributable to The ONE Group Hospitality, Inc.:
|
|
|
|
||||
Loss from continuing operations
|
$
|
(295,536
|
)
|
|
$
|
(458,738
|
)
|
Loss (income) from discontinued operations, net of taxes
|
106,230
|
|
|
(1,835
|
)
|
||
Net loss attributable to The ONE Group Hospitality, Inc.
|
$
|
(401,766
|
)
|
|
$
|
(456,903
|
)
|
|
|
|
|
||||
Net loss attributable to The ONE Group Hospitality, Inc.
|
$
|
(401,766
|
)
|
|
$
|
(456,903
|
)
|
Other comprehensive income (loss)
|
|
|
|
||||
Currency translation adjustment
|
(56,178
|
)
|
|
(21,405
|
)
|
||
|
|
|
|
||||
Comprehensive loss
|
$
|
(457,944
|
)
|
|
$
|
(478,308
|
)
|
|
Three Months Ended March 31,
|
||||
|
2017
|
|
2016
|
||
Revenues:
|
|
|
|
||
Owned unit net revenues
|
88.7
|
%
|
|
87.7
|
%
|
Management and incentive fee revenue
|
11.3
|
%
|
|
12.3
|
%
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
||
Cost and expenses:
|
|
|
|
||
Owned operating expenses:
|
|
|
|
||
Food and beverage costs (1)
|
25.8
|
%
|
|
24.5
|
%
|
Unit operating expenses (1)
|
63.5
|
%
|
|
64.3
|
%
|
General and administrative
|
14.3
|
%
|
|
16.4
|
%
|
Depreciation and amortization
|
4.2
|
%
|
|
3.2
|
%
|
Lease termination expense
|
0.1
|
%
|
|
—
|
%
|
Pre-opening expenses
|
3.5
|
%
|
|
5.5
|
%
|
Equity in income of investee companies
|
(0.2
|
)%
|
|
(0.5
|
)%
|
Derivative income
|
—
|
%
|
|
(0.6
|
)%
|
Interest expense, net of interest income
|
1.3
|
%
|
|
0.6
|
%
|
Other expense
|
0.1
|
%
|
|
1.4
|
%
|
|
|
|
|
||
Total costs and expenses
|
102.5
|
%
|
|
103.8
|
%
|
|
|
|
|
||
Loss from continuing operations before provision for income taxes
|
(2.5
|
)%
|
|
(3.8
|
)%
|
|
|
|
|
||
Income tax benefit
|
(0.1
|
)%
|
|
(0.4
|
)%
|
|
|
|
|
||
Loss from continuing operations
|
(2.4
|
)%
|
|
(3.4
|
)%
|
|
|
|
|
||
Loss (income) from discontinued operations, net of taxes
|
0.5
|
%
|
|
—
|
%
|
|
|
|
|
||
Net loss
|
(2.9
|
)%
|
|
(3.4
|
)%
|
Less: net income attributable to noncontrolling interest
|
(1.0
|
)%
|
|
(0.7
|
)%
|
|
|
|
|
||
Net loss attributable to The ONE Group Hospitality, Inc.
|
(2.0
|
)%
|
|
(2.8
|
)%
|
|
|
|
|
||
Amounts attributable to The ONE Group Hospitality, Inc.:
|
|
|
|
||
Loss from continuing operations
|
(1.4
|
)%
|
|
(2.8
|
)%
|
Loss (income) from discontinued operations, net of taxes
|
0.5
|
%
|
|
—
|
%
|
Net loss attributable to The ONE Group Hospitality, Inc.
|
(2.0
|
)%
|
|
(2.8
|
)%
|
|
|
|
|
||
Net loss attributable to The ONE Group Hospitality, Inc.
|
(2.0
|
)%
|
|
(2.8
|
)%
|
Other comprehensive income (loss)
|
|
|
|
||
Currency translation adjustment
|
(0.3
|
)%
|
|
(0.1
|
)%
|
|
|
|
|
||
Comprehensive loss
|
(2.2
|
)%
|
|
(2.9
|
)%
|
|
Three Months Ended March 31, 2017
|
|
Three Months Ended March 31, 2016
|
||||||||||||||||||||||||||||
|
STKS
|
|
F&B
|
|
OTHER
|
|
TOTAL
|
|
STKS
|
|
F&B
|
|
OTHER
|
|
TOTAL
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Owned unit net revenues
|
$
|
16,369,334
|
|
|
|
|
$
|
1,743,648
|
|
|
$
|
18,112,982
|
|
|
$
|
13,680,430
|
|
|
|
|
$
|
699,500
|
|
|
$
|
14,379,930
|
|
||||
Management and incentive fee revenue
|
|
|
$
|
2,313,716
|
|
|
|
|
2,313,716
|
|
|
|
|
$
|
2,014,051
|
|
|
|
|
2,014,051
|
|
||||||||||
Total revenue
|
16,369,334
|
|
|
2,313,716
|
|
|
1,743,648
|
|
|
20,426,698
|
|
|
13,680,430
|
|
|
2,014,051
|
|
|
699,500
|
|
|
16,393,981
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Owned operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Food and beverage costs
|
4,325,331
|
|
|
|
|
348,730
|
|
|
4,674,061
|
|
|
3,388,853
|
|
|
|
|
139,900
|
|
|
3,528,753
|
|
||||||||||
Unit operating expenses
|
10,755,613
|
|
|
|
|
752,161
|
|
|
11,507,774
|
|
|
9,102,914
|
|
|
|
|
144,741
|
|
|
9,247,655
|
|
||||||||||
Total costs and expenses
|
15,080,944
|
|
|
—
|
|
|
1,100,891
|
|
|
16,181,835
|
|
|
12,491,767
|
|
|
—
|
|
|
284,641
|
|
|
12,776,408
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Income from restaurant and hospitality operations
|
$
|
1,288,390
|
|
|
$
|
2,313,716
|
|
|
$
|
642,757
|
|
|
4,244,863
|
|
|
$
|
1,188,663
|
|
|
$
|
2,014,051
|
|
|
$
|
414,859
|
|
|
3,617,573
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
General and administrative
|
|
|
|
|
|
|
|
|
|
2,920,897
|
|
|
|
|
|
|
|
|
|
|
|
2,683,696
|
|
||||||||
Lease termination expense
|
|
|
|
|
|
|
28,161
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|
865,870
|
|
|
|
|
|
|
|
|
|
|
|
522,639
|
|
||||||||
Pre-opening expenses
|
|
|
|
|
|
|
|
|
|
714,342
|
|
|
|
|
|
|
|
|
|
|
|
900,186
|
|
||||||||
Equity in income of investee companies
|
|
|
|
|
|
|
|
|
|
(45,311
|
)
|
|
|
|
|
|
|
|
|
|
|
(82,585
|
)
|
||||||||
Derivative income
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
(100,000
|
)
|
||||||||
Interest expense, net of interest income
|
|
|
|
|
|
|
|
|
|
258,990
|
|
|
|
|
|
|
|
|
|
|
|
98,169
|
|
||||||||
Other expense
|
|
|
|
|
|
|
|
|
|
11,948
|
|
|
|
|
|
|
|
|
|
|
|
225,034
|
|
||||||||
Total costs and expenses
|
|
|
|
|
|
|
|
|
|
4,754,897
|
|
|
|
|
|
|
|
|
|
|
|
4,247,139
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Loss from continuing operations before provision for income taxes
|
|
|
|
|
|
|
|
|
|
$
|
(510,034
|
)
|
|
|
|
|
|
|
|
|
|
|
$
|
(629,566
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Net loss attributable to The ONE Group Hospitality, Inc.
|
$
|
(401,766
|
)
|
|
$
|
(456,903
|
)
|
Net loss attributable to noncontrolling interest
|
(197,752
|
)
|
|
(104,877
|
)
|
||
Net loss
|
(599,518
|
)
|
|
(561,780
|
)
|
||
Interest expense, net of interest income
|
258,990
|
|
|
98,169
|
|
||
Provision (benefit) for income taxes
|
(16,746
|
)
|
|
(65,951
|
)
|
||
Depreciation and amortization
|
865,870
|
|
|
522,639
|
|
||
|
|
|
|
||||
EBITDA
|
508,596
|
|
|
(6,923
|
)
|
||
|
|
|
|
||||
Deferred rent (1)
|
(37,514
|
)
|
|
60,215
|
|
||
Pre-opening expenses
|
714,342
|
|
|
900,186
|
|
||
Lease termination expense
|
28,161
|
|
|
—
|
|
||
Loss (income) from discontinued operations, net of taxes
|
106,230
|
|
|
(1,835
|
)
|
||
Derivative income
|
—
|
|
|
(100,000
|
)
|
||
Stock based compensation
|
153,339
|
|
|
143,967
|
|
||
|
|
|
|
||||
Adjusted EBITDA
|
1,473,154
|
|
|
995,610
|
|
||
Adjusted EBITDA attributable to noncontrolling interest
|
(137,162
|
)
|
|
(71,552
|
)
|
||
Adjusted EBITDA attributable to The ONE Group Hospitality, Inc.
|
$
|
1,610,316
|
|
|
$
|
1,067,162
|
|
(1)
|
Deferred rent is included in unit operating expenses on the statement of operations and comprehensive income.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Net loss attributable to The ONE Group Hospitality, Inc.
|
$
|
(401,766
|
)
|
|
$
|
(456,903
|
)
|
Net loss attributable to noncontrolling interest
|
(197,752
|
)
|
|
(104,877
|
)
|
||
|
|
|
|
||||
Net loss
|
(599,518
|
)
|
|
(561,780
|
)
|
||
|
|
|
|
||||
Lease termination expense
|
28,161
|
|
|
—
|
|
||
Loss (income) from discontinued operations, net of taxes
|
106,230
|
|
|
(1,835
|
)
|
||
Derivative income
|
—
|
|
|
(100,000
|
)
|
||
Stock based compensation
|
153,339
|
|
|
143,967
|
|
||
Adjusted net loss
|
(311,788
|
)
|
|
(519,648
|
)
|
||
Adjusted net loss attributable to noncontrolling interest
|
(197,752
|
)
|
|
(104,877
|
)
|
||
Adjusted net loss attributable to The ONE Group Hospitality, Inc.
|
$
|
(114,036
|
)
|
|
$
|
(414,771
|
)
|
|
Three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
||
Operating activities
|
$
|
848
|
|
|
$
|
(380
|
)
|
Investing activities
|
(1,353
|
)
|
|
(3,598
|
)
|
||
Financing activities
|
731
|
|
|
3,373
|
|
||
Effect of exchange rate changes on cash
|
(35
|
)
|
|
(23
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
191
|
|
|
$
|
(628
|
)
|
•
|
the process may be time-consuming and may disrupt our operations and divert management’s and our employees’ attention;
|
•
|
perceived uncertainties as to our future direction may result in the loss of, or our inability to attract and retain, key employees or business partners;
|
•
|
our announcement that we are engaged in the evaluation process and any announcement that we may make regarding the results of the evaluation process may increase the volatility of the market price of our common stock;
|
•
|
the process will increase expenditures for professional advisors that we engage to assist in the review process; and
|
•
|
we may not be able to identify and consummate a strategic transaction more enhancing of long-term stockholder value than continuing to execute our current strategy.
|
Exhibit
|
|
Description
|
|
|
|
10.1
|
|
Separation Agreement, dated as of April 21, 2017, by and between Samuel Goldfinger and the Company.
|
|
|
|
10.2
|
|
Business Loan and Security Agreement by and between the borrowers named therein and American Express Bank, FSB, dated as of February 17, 2017 (Incorporated by reference to Form 8-K filed on March 29, 2017).
|
|
|
|
31.1
|
|
Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.
|
|
|
|
31.2
|
|
Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.
|
|
|
|
32
|
|
Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.1
|
|
The following information from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 formatted in XBRL: (i) Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2015; (ii) Statements of Operations for the Three Months Ended March 31, 2017 and 2016 (unaudited); (iii) Statement of Stockholders’ Equity (Deficit for Three Months Ended March 31, 2017 and 2016; (iv) Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016 (unaudited) and (v) Notes to Financial Statements (unaudited).
|
|
THE ONE GROUP HOSPITALITY, INC.
|
|
|
|
|
|
By:
|
/s/ SAMUEL GOLDFINGER
|
|
|
Samuel Goldfinger
|
|
|
Chief Financial Officer
|
1 Year ONE Group Hospitality Chart |
1 Month ONE Group Hospitality Chart |
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